Vietnam faces a loss of up to USD 480 million (EUR 409.8 million) per year from reduction in its seafood exports to the European Union market if it decides to impose a so-called “red card” penalty.
The European Commission issued a “yellow card” to Vietnam in October 2017, warning Vietnam it could issue a red card, which would ban its seafood from entering the E.U., unless it did more to tackle illegal, unreported, and unregulated (IUU) fishing.
The red card would cause severe losses to Vietnam’s seafood exports, according to a report from the Vietnam Association of Seafood Exporters and Producers (VASEP) and the World Bank. Their report “A Trade-Based Analysis of the Economic Impact of Non-Compliance with Illegal, Unreported and Unregulated Fishing: The Case of Vietnam” was issued on 10 August. In it, they estimate Vietnam will lose USD 387 million (EUR 330.4 million) per year from the loss of export revenue from wild-caught seafood including tuna, squid, and octopus, and USD 93 million (EUR 79.4 million) annually from a loss of income from farmed seafood exports, which would be indirectly affected by the E.U.’s ban. Vietnam’s wild-caught seafood output is likely to decrease by about 30 percent within two to three years of a red card being implemented, the report found.
Following the issuance of the yellow card - between 2017 and 2019 – Vietnam’s seafood exports to the E.U. contracted by 12 percent in value, with that loss estimated at USD 183.5 million (EUR 156.7 million). Octopus exports to the E.U. dropped 37 percent; mollusk and crab exports declined 11 percent; and tuna exports fell 2 percent. The export value of farmed seafood sent from Vietnam to the E.U. also shrank by 13 percent during the timeframe.
In 2020, Vietnam’s E.U. seafood exports decreased 5.7 percent by volume to USD 959 million (EUR million), both due to the yellow card and the negative impacts from the COVID-19 pandemic.
Since 2019, the E.U. has dropped from being the second-largest market for Vietnam’s seafood products to fourth-largest buyer, after the U.S., Japan, and China.
Since 2017, the E.U. has been conducting a review of Vietnam’s fisheries- and seafood-related policies to determine whether to maintaining the yellow card status, issue a red card, or rescind the yellow card and resume normal trading relations.
If the yellow card is removed, Vietnam is predicted to earn between USD 1.2 billion and USD 1.4 billion (EUR 1 billion and EUR 1.2 billion) in seafood exports to the E.U., VASEP found, in large part due to the European Union-Vietnam Free Trade Agreement (EVFTA).
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